A set back for “Airbnb”-style letting

Lessees of long leases of dwellings may face problems if they attempt to let out those premises on a short-term letting.

In the recent case of Nemcova v Fairfield Rents Limited[2016] UKUT303 (LC), the Upper Tribunal decided that a short-term letting was in breach of a covenant in the lease which restricted the use of the premises.

The tenant, Mrs Nemcova, was the leaseholder of a flat which had a term of 99 years. One of the covenants in the lease was not to use the demised premises or permit them to be used for any illegal or immoral purpose or for any purpose whatsoever other than as a private residence.

The landlord applied to the First-Tier Tribunal (Property Chamber) for a determination under s. 168(4) of the Commonhold and Leasehold Reform Act 2002 (determination of breach before forfeiture notice).

Mrs Nemcova accepted that she granted a series of short-term lettings of the flat and advertised its availability on the internet. She claimed that she only let the flat out for about 90 days a year and the lettings were almost all to business vistors rather than holiday lets.

The First-Tier Tribunal determined that Mrs Nemcova was in breach. She appealed.

The Upper Tribunal upheld the determination, concluding that the duration of the occupier’s occupation is material as to whether the occupier is using the premises as a private residence. The judge held that in order for a property to be used as the occupier’s private residence, there must be a degree of permanence going beyond being there for a weekend or a few nights in the week. The judge did not consider that where a person occupies for a matter of days and then leaves it can be said that during the period of occupation he or she is using the property as his or her private residence. In such circumstances the occupation is too transient to be considered to be using the premises as a private residence. Accordingly, the tenant was in breach of the restrictive covenant.

This case is likely to be of importance to landlords where the use of flats within a building for short-term letting can cause undue disruption and annoyance to other residents.

It will be important, therefore, for tenants to give careful consideration to the terms of their lease before letting out their flat on a short-term letting.

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Simon Wood

Barrister, Dispute Resolution

Simon is a barrister within the Dispute Resolution department having been called to the bar in 1987. He was a tenant in chambers in the...

Barrister, Dispute Resolution

Simon Wood

Simon is a barrister within the Dispute Resolution department having been called to the bar in 1987. He was a tenant in chambers in the Middle Temple for ten years where he had a broad practice in general commercial and civil litigation before increasingly specialising in property litigation. Before he joined Hart Brown in June 2012 he was in private practice in central London.

Simon has substantial expertise in all aspects of property disputes as well as property related professional negligence claims and insolvency.

Simon is a trained mediator and a keen advocate of alternative dispute resolution as a way of resolving claims. He is also a member of the Property Litigation Association in the Middle Temple.

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